consumer behavior regarding investment in ahmedabad

7/27/2019 Consumer Behavior Regarding Investment in Ahmedabad

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Sub Code: 830004 Enrollment No:-107320592056

A Project

On

Consumer Behavior Regarding Investment in Ahmedabad

(As a partial of fulfillment of the Master of Business Administration for Summer Internship Program)

Submitted to

MBA Department

LDRP-Institute of Technology and Research, Gandhinagar.

(Affiliated to Gujarat Technological University, Ahmedabad)

Under the Guidance of

Prof. S. K. Mantrala

Submitted by

Dipali Varia

MBA-SEM III

Sign of External Examiner Sign of Internal Examiner

_______________________ _______________________

LDRP-Institute of Technology and Research, Gandhinagar.

MBA Department (732)

Batch (2010-12)


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LDRP Institute of Technology & Research, Gandhinagar

Preface

Summer Training is the bridge for a student that takes him from his theoretical Knowledge world

to practical industry world. The main purpose of industrial visit is to expose for industrial and

business environment, which cannot be possible in the classroom.

Savings form an important part of the economy of any nation. With the savings invested in

various options available to the people, the money acts as the driver for growth of the country.

Indian financial scene too presents a plethora of avenues to the investors. Though certainly not

the best or deepest of markets in the world, it has reasonable options for an ordinary man to

invest his savings.

One needs to invest and earn return on their idle resources and generate a specified sum of

money for a specific goal in life and make a provision for an uncertain future. One of the

important reasons why one needs to invest wisely is to meet the cost of inflation. Inflation is the

rate at which the cost of living increases.

The cost of living is simply what it cost to buy the goods and services you need to live. Inflation

causes money to lose value because it will not buy the same amount of a good or service in the

future as it does now or did in the past. The sooner one starts investing the better. By investing

early you allow your investments more time to grow, whereby the concept of compounding

increases your income, by accumulating the principal and the interest or dividend earned on it,

year after year.

The three golden rules for all investors are:

Invest early

Invest regularly

Invest for long term and not for short term


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Acknowledgement

I would like to express my gratitude to all those who gave me the possibilities to complete this

thesis. I would like to thank Prof. Surya Krishna Mantrala, Head of Department, LDRP

Institute of Technology & Research, Summer Internship Coordinator; Prof. Hemali Broker, who

helped me throughout the project and also in the successful completion of my project. She has

given a lot of extra input in my project. Besides practical experience, I have gained a lot out of

this project. I am thankful to all the faculty members of MBA department for their continuous

support & guidance for the completion of this project.

I am thankful to LDRP College for giving me an opportunity to do project.

I would like to thankMr.Sujit Nair (Reginal Head),Mr. Abbas Bhojani (Branch Manager),

Mr. Jay Valani (Franchise Manager), Ms. Hetal Shah (HR Manager) BMA Wealth

Creators, Ahmedabad and college authorities for providing me the opportunity to work with one

of the prestigious organization.

Through this column, it would be my utmost pleasure to express our warm thanks to her for their

encouragement, co-operation and consent without which we mightnt be able to accomplish this

project.

Dipali Varia


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Executive Summary

Investing in equities in a market like India is speculative and involves risk that may be greater

than other types of investment strategies. Before investing an Investor should be careful enough

about him investment decision to avoid erosion of wealth. As seen in the recent times the

unpredictability of market is more detrimental to the retail investors as it seems to be lucrative

for speculative gains of short duration of time. Hence an investor has to evaluate his options

carefully for a prudent investment, keeping long-term horizon in mind.

The report has tried to bring out the parameters those are of paramount importance to general

public dealing in an equity trading on day-to-day and delivery base trading. The working

methodology has been discussed i.e. the data collection methods, sampling methods and the

survey questionnaire methods. The questionnaire prepared is designed so as to cover a wide

range of customer touch points

The report gives an overview about the investors perception think while making investments in

different type of financial instruments.

A sample of 100 people was selected randomly and survey was done as per the parameters of the

questionnaire. The results of every parameter have been included in this report and shown

graphically (Pie Charts, bar graphs etc.) A complete structure of the research design has been

included.

From the all survey which I have done throughout my project is giving me the final conclusion

which shows that which financial instrument is good or useful to the investors in future to make

investment. It also shows that which instrument give profit to the investors. In this project I have

used many statistical instruments like hypothesis and cross tabulation. This is very important

statistical test.


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With the help of all data in which I have done cross tabulation of different question with

different factors like Income, Age, and Occupation. This shows that they are dependent or

independent on any of the above factor.I have also used hypothesis testing in the ranking

question. This shows that which investors give highest rank and lowest rank to the different

plans. Highest rank shows that the investors are satisfied with that and vise a versa. So they are

select rank as per their thinking and what they believe.

So overall what the investors want to take in mind while they are going for investing their money

is important for them. And they have to take in mind all the factors which affect their

investment/money.


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TABLE OF CONTENTS

Serial No. Content Page Number

Preface I

Acknowledgement II

Executive summary III

1. Introduction of Project 1

2. Literature Review 2-3

3 Research Methodology 4-6

4. Industry Profile 7-8

5. Company Profile 9-13

Mission & Vision

BMA Management Team

Corporate Entities

Product & Services

SWOT Analysis

6. Conceptual Framework 14-15

7. Major Competitors 16-20

8. Different types Of Financial Instruments 21-32

9. Data Analysis & Interpretation 33-75

10. Findings & Recommendation 76-77

11. Contribution From The Study 78-79

12. Learning During The Study 80

13. Limitations of the study 81

14. Conclusion 82

15. Bibliography 83

16. Appendix 84

Questionnaire


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List of charts and tables

Table & Chart no. Content Page Number

1 Age 33

2 Gender 34

3 Marital Status 35

4 Occupation 36

5 Income 37

6 Years of investment 38

7 Various Instrument 39

8 Period of Instrument 40

9 Purpose of Instrument 41

10 Instruments 42

11 % of Saving in Investment 43

12 Direct into Equity 44

13 Kinds of Stocks 45

14 Induces to Invest in Intraday 50

15 Pattern of Investment 55

16 Kind of Investing or Intraday 56

17 Induces to stay in Investment 61

18 Reasons to Invest in Mutual Fund 62

19 Reasons to Invest in Insurance 63

20 Induces to Invest in Particular Option 64

21 Awareness 65


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CHAPTER 1

Introduction of Project

Knowledge & human power are synonymous, once said the great philosopher Francis

Bacon. However based on experience within todays global markets, he would probable say

the ability to capture, communicate and leverage knowledge to solve problems is human

power. This raises the question; how exactly one can best capture, communicate and leverage

knowledge, especially within the world of marketing knowledge.

The answer probably lies in the statement itself, by communicating your ideas & devising

ways and means to give to shape your plans into reality. This requires long term planning and

shrewd thinking, for it is the long-term investments that will ultimately help you scale greatheight.

The report contains useful and preliminary data regarding available instrument to invest in

market. It is very difficult to cover each and every financial instrument so in this project I

have explained some of the Instrument which is important in the market.

Whatever may be the limitation in my way, I have tried to fully justify my project. By

combining the theoretical knowledge and practical experience of training gained by me, I havetried to make the project report as good and ideal as possible. I have tried to present all

theoretical and practical aspects of project in simple and lucid language.

The basic principles, which we (an investor) should use in creating investment strategy:

a) Harness the power of compoundingb) Start earlyc) Have realistic expectationsd) Invest regularly


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CHAPTER 2

Literature review:

Literature suggests that major research in the area of investors behavior has been done by

behavioral scientists such as Weber (1999), Shiller (2000) and Shefrin (2000). Shiller (2000)

who strongly advocated that stock market is governed by the market information which

directly affects the behavior of the investors. Several studies have brought out the relationship

between the demographics such as Gender, Age and risk tolerance level of individuals. Of this

the relationship between Age and risk tolerance level has attracted much attention.

Horvath and Zuckerman suggested that one s biological, demographic and socioeconomic

characteristics; together with his/her psychological makeup affects one s risk tolerance level.

Malkiel suggested that an individual s risk tolerance is related to his/her household situation,

lifecycle stage and subjective factors. Mittra discussed factors that were related to individuals

risk tolerance, which included years until retirement, knowledge sophistication, income and

net worth.

Wallach and Kogan (1961) were perhaps the first to study the relationship between risk

tolerance and age. Cohn, Lewellen found risky asset fraction of the portfolio to be positively

correlated with income and age and negatively correlated with marital status. Morin and

Suarez found evidence of increasing risk aversion with age although the households appear to

become less risk averse as their wealth increases. Yoo (1994) found that the change in the

risky asset holdings were not uniform. He found individuals to increase their investments in

risky assets throughout their working life time, and decrease their risk exposure once they

retire. Lewellen while identifying the systematic patterns of investment behavior exhibited by

individuals found age and expressed risk taking propensities to be inversely related with major

shifts taking place at age 55 and beyond.

Indian studies on individual investors' were mostly confined to studies on share ownership,

except a few. The RBI's survey of ownership of shares and L.C. Gupta's enquiry into the

ownership pattern of Industrial shares in India were a few in this direction. The NCAER's


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studies brought out the frequent form of savings of individuals and the components of

financial investments of rural households. The Indian Shareowners Survey brought out a

volley of information on shareowners. Rajarajan V classified investors on the basis of their

demographics. He has also brought out the investors' characteristics on the basis of their

investment size. He found that the percentage of risky assets to total financial investments had

declined as the investor moves up through various stages in life cycle. Also investors'

lifestyles based characteristics has been identified. The above discussion presents a detailed

picture about the various facets of risk studies that have taken place in the past. In the present

study, the findings of many of these studies are verified and updated.


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CHAPTER 3

Research Methodology:

Objectives of the Study:The purpose of the analysis is to determine the investment behavior of investors and

investment preferences for the same.

Primary Objective

(1)The main objective of my project is to study consumer behavior regardinginvestment in India.

(2)To identify the objective of investment plan of an Ahmedabad individualinvestor.

(3)To know the preferred investment avenues of the Ahmedabad individualinvestor.

(4)To study the different types of risks involved in different kinds of investments.Secondary objective

(1)To identify the preferred sources of information influencing investmentdecisions.

(2)To find out how investors get information about the various financialinstruments.

Scope of the Study:Investment has been subjected to speculations and inefficiencies, which are beached to the

rationality of the investor. Traditional finance theory is based on the two assumptions. Firstly,

investors make rational decisions; and secondly investors are unbiased in their predictions

about future returns of the stock. However financial economist have now realized that the long

held assumptions of traditional finance theory are wrong and found that investors can be

irrational and make predictable errors about the return on investment on their investments.


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This analysis on Individual Investors Behavior is an attempt to know the profile of the

investor and also know the characteristics of the investors so as to know their preference with

respect to their investments. The study also tries to unravel the influence of demographic

factors like age on risk tolerance level of the investor.

Sampling techniqueInitially, a rough draft will be prepared keeping in mind the objective of the research. The

final questionnaire will be arrived at only after certain important changes are incorporated.

Convenience sampling technique will be used for collecting the data from different investors.

The investors are selected by the convenience sampling method. The selection of units from

the population based on their easy availability and accessibility to the researcher is known as

convenience sampling. Convenience sampling is at its best in surveys dealing with an

exploratory purpose for generating ideas and hypothesis.

Sampling unit:The respondents who will be asked to fill out the questionnaires are the sampling units. These

comprise of employees of companies, government employees, self employed, professionals

and other investors.

Research InstrumentIn this study the research instrument is Questionnaire. It consists of set of question presented

to respondents. The questionnaire is structured & combinations of various close and open

ended questions. Close endedquestion already have the possible answers and the open ended

question allow the respondents to answer in their own word. Hypothesis testing and cross

tabulation is also used in this survey.

Sampling size: 100 customersFormula for sample size = z2 p q/ e2

Confidence interval: 95%,


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Error: 0.05

P= 1/10, q= 9/10

From Z value table Z= 1.645

n = (1.645*1.645*0.1*0.9)/0.05*0.05

= 97.4169

So we have taken n = 100

Sampling Method: Probability Sampling.Sampling area: The area of the research is Ahmadabad. Collection and Sources of data:Market research requires two kinds of data, i.e., primary data and secondary data.

Primary data:

The data, which are collected for the first time, directly from the respondents to the

base of knowledge & belief of the research, are called primary data.

So far as this research is concerned, primary data is the main source of information.

The data collected is through questionnaire & information provided by the respondent.

Secondary data:

When data are collected & compiled in a published nature, it is called secondary data.

So far as this research is concerned, Internet & many magazines and the brochures

have been referred as secondary data.

Analysis and findings of Report:

The collection of data it converts into the useful information which consist tabulation

of data with the help of statistical measures.


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CHAPTER 4

Industry Profile

Indian financial industry is considered as one of the strongest financial sectors among the

world markets. Many industry experts may give various reasons for such Indian financial

industry reputation, but there is only one answer which no one can deny, is the effective

control and governance of the country s supreme monetary authority the RESERVE BANK

OF INDIA (RBI).

Financial sector in India has experienced a better environment to grow with the presence of

higher competition. The financial system in India is regulated by independent regulators in the

field of banking, insurance, and mortgage and capital market. Government of India plays a

significant role in controlling the financial market in India.

Ministry of Finance, Government of India controls the financial sector in India. Every year the

finance ministry presents the annual budget on 28th February. The Reserve Bank of India is

an apex institution in controlling banking system in the country. Its monetary policy acts as a

major weapon in India's financial market.

Various governing bodies in financial sector: RBI: - Reserve Bank of India is the supreme authority and regulatory body for all the

monetary transactions in India. RBI is the regulatory body for various Banking and

Non Banking financial institutions in India.

SEBI: - Securities and Exchange Board of India is one of the regulatory authorities forIndia's capital market.

IRDA: - Insurance regulatory and development authority in India regulates all theinsurance companies in India.

AMFI: - Association of mutual funds in India regulates all the mutual fund companiesin India

FIPB: - Foreign investments promotion board regulates all the foreign directinvestments made in India.


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Success in India

Success in India will depend on the correct estimation of the country's potential,

underestimation of its complexity or overestimation of its possibilities can lead to failure.

While calculating, due consideration should be given to the factor of the inherent difficulties

and uncertainties of functioning in the Indian system. Entering India's marketplace requires a

well-designed plan backed by serious thought and careful research. For those who take the

time and look to India as an opportunity for long-term growth, not short-term profit- the trip

will be well worth the effort.

Market potential

India is the fifth largest economy in the world (ranking above France, Italy, the United

Kingdom, and Russia) and has the third largest GDP in the entire continent of Asia. It is also

the second largest among emerging nations. (These indicators are based on purchasing power

parity.) India is also one of the few markets in the world which offers high prospects for

growth and earning potential in practically all areas of business. Yet, despite the practically

unlimited possibilities in India for overseas businesses, the world's most populous democracy

has, until fairly recently, failed to get the kind of enthusiastic attention generated by other

emerging economies such as China.

Lack of Enthusiasm among Investors

The reason being, after independence from Britain 50 years ago, India developed a highly

protected, semi-socialist autarkic economy. Structural and bureaucratic impediments were

vigorously fostered, along with a distrust of foreign business. Even as today the climate in

India has seen a sea change, smashing barriers and actively seeking foreign investment, many

companies still see it as a difficult market. India is rightfully quoted to be an incomparable

country and is both frustrating and challenging at the same time.


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CHAPTER 5

Company Profile

Founder Chairman: Bhuramal Mulchand Agarwalla Head Office: KolkataBMA Wealth Creators Limited

A premier in the financial services industry, BMA Wealth Creators Specializes in extending

customized financial solutions to individuals and corporate. The Company works towards

understanding your financial ambitions and adjusts to your risk profile. Their expertise

combined with thorough understanding of the financial markets results in appropriate

investment solutions for you.

The 1000 crore BMA Group has created its forte by promoting successful ventures in the

fields of coal mining, refractory, steel and Ferro alloy in the form of established names in the

market such as BMA Stainless Steel (Captain TMT Bars), Prop. Snowtex Udyog Ltd,

Anjanery Ferro Alloys Limited, Maithan Alloys Limited, Maithan Smelters Limited and

BMA International. Its continuous strive to achieve excellence and growth keeps it abreast

of the latest in technology and best business practices, thereby making it customer oriented

while forging alliances, high quality standards and proactive business cultures.

They at, BMA Wealth Creators, realize your dreams, needs, aspirations and concerns as

closely as you do. This is reflected in every move we make with and for you because our

relationship with YOU matters to us.

Companys Competitive Strength lies in its people. Their Regional Management Team works

hand in hand with the Companys Risk Management System and specializes in retail

operation handling a large and diverse distribution network, putting in record an unfaltering

track of growth and profit.


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MISSION

To establish itself as a financial supermarket providing integrated investment services.

VISION

To provide integrated financial services thereby building Investor wealth and confidence.

Promoter Group

Founded by Late Shri Bhuramal Agarwalla in 1920 with coal mining business which was

nationalized during 1971 and 1973, BMA is an INR 11 billion business group today. The

group currently has business interests in refractories, ferroalloys, iron & steel, financial

services and cement industries. It has geographic presence across the country through

manufacturing facilities in west Bengal, Jharkhand, Assam, Meghalaya and Andhra Pradesh.These facilities are supported by marketing office all over India. The group has sourav

ganguly, Kolkata knight riders, ICC Corporate Olympiad (Kolkata), The CNBC money Yatra

as its endorsements. It is also the principle sponsors of CNBC Awaaz Yatra.


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Management Team

This Company is managed by a team of highly qualified and experienced professionals from

the finance industry across the country. Know more about them:

Corporate Entities

BMA Wealth Creators heads two companies under its corporate umbrella. They are:

BMA Wealth Creators Limited:

A leading financial organization, BMA Wealth Creators Limited is a one-stop

solution centre for all financial services, queries and ideas of its clients. The Company holds

corporate membership in two of the leading bourses of the country viz. National Stock

Exchange Limited and Bombay Stock Exchange.

BMA Commodities Private Limited:

The Company holds corporate membership in commodities exchange NCDEX and

MCX besides being SEBI approved, AMFI registered Mutual Fund advisory and

intermediary.


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SWOT ANALYSIS

Strength: -

Companys strength is their Product UTS (Unlimited Trade Scheme).Biggest strength ofBMA Wealth creators is flat brokerage charges per trade 1 paisa.

Company is also Providing Lifetime D-mat a/c with lowest cost without anymaintenance charges.

Weaknesses: -

Most of the Customers are not aware about the company and their product. Company does not have a good marketing department.

Opportunities: -

Company has better future option in stock broking firm. Indian financial market is rapidly growing and BMA is in initial stage and expanding

its business across India so company has an opportunity to take advantages of growth

of finance sectors in India.

Threat: -

There are various competitors in the market so company has to differentiate theirproduct from the other company.

Many companies have entered in the market because of that company has to take beststep to attract more customer to invest in their firm.


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CHAPTER 5

Conceptual Framework

Intodays world there has been flow of capital from developed country economies, which has

high potential for growth. FIIs and other investor invest in emerging market based on their

study about country economic and socio-political situation of the country. They keep on

switching investment from country to country on basis on their research and analysis.

In case of India after liberalization many changes has taken place. There has been an

increasing importance of Indian economy. The way Foreign Institutional Investors (FIIs) see

this and Overseas Corporate Bodies (OCB) are bringing their money in Indian capital market.

It has been predicted that India will become one of the world fastest growing economy. Based

on economic size, income and demographics, global demand pattern and currency movement.

India will change into a larger and rich consumer market. Changing consumption pattern

increasing household saving

Investment is the money you earn partly spent and rest is invested for meeting future goals.

This is called investment.

Need to invest to:I. Earn return on our idle resources

ii. Generate a specified sum of money for a specific goal in life

iii. Make a provision for an uncertain future

IV to beat inflation.

More specifically, an investment is the current commitment of money for a specific period in

order to derive future payments that will compensate for (1) the time the funds are committed

(2) the expected rate of inflation and (3) the uncertainty of the future payments.


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Choosing the Right Investment Options

The choice of the best investment options for you will depend on your personal circumstances

as well as general market conditions. For example, a good investment for a long-term

retirement plan may not be a good investment for higher education expenses. In most cases,

the right investment is a balance of three things: Liquidity, Safety and Return.

Liquidity - how accessible is your money?

How easily an investment can be converted to cash, since part of your invested money must

be available to cover financial emergencies.

Safety - what is the risk involved?

The biggest risk is the risk of losing the money you have invested. Another equally

important risk is that your investments will not provide enough growth or income to

offset the impact of inflation, which could lead to a gradual increase in the cost of living.

There are additional risks as well (like decline in economic growth). But the biggest risk

of all is not investing at all.

Return - what can you expect to get back on your investment?

Investments are made for the purpose of generating returns. Safe investments often

promise a specific, though limited return. Those that involve more risk offer the

opportunity to make - or lose - a lot of money.

To a large extent, the choice of the right investment option will also depend upon your

financial goals. For example, if you want to invest for funding your vacation next year,

don't choose an investment vehicle that has a three-year lock-in. Similarly, if you want toinvest for your daughter's marriage after 10 years, don't invest in 1yr bonds for the next

10 years. Instead, choose an option that matches your investment horizon.


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CHAPTER 6

MAJOR COMPETITORS

There are many competitors which is stand in competition with BMA. Some of the companies

like Kotak securities, Angel Broking, Motilal oswal securities, Sherkhan Ltd, India Bulls

Private Ltd, India Infoline etc are the major competitors of the BMA. Some are explain as

follow which are major competitors of BMA & they have to face competition for stand in

these competitive market.

Kotak Securities

Incorporated in 1994, Kotak Securities Limited, the leading stock broking house of India is

100% subsidiary of Kotak Mahindra Bank. Company offering includes stock broking through

the branch and Internet, Investments in IPO, Mutual funds and Portfolio management service.

It also offers portfolio management services to high net worth individuals and corporate

customers. Kotak securities also distributes a range of financial products, including company

fixed deposits, mutual funds, initial public offerings, secondary debt, equity, and small

savings schemes.

Most of the services provided by the company are available through its internet portal. In

early 2009 company launched Saxo's global trading platform in India. This platform provide

direct access to equities, ETF's and REITS spanning 24 stock exchanges across the USA,

Europe, Asia and Australia.


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Angel Broking

1

Angel Broking's tryst with excellence in customer relations began in 1987. Today, Angel has

emerged as one of the most respected Stock-Broking and Wealth Management Companies in

India. With its unique retail-focused stock trading business model, Angel is committed to

providing Real Value for Money to all its clients.

The Angel Group is a member of the Bombay Stock Exchange (BSE), National Stock

Exchange (NSE) and the two leading Commodity Exchanges in the country: NCDEX &

MCX. Angel is also registered as a Depository Participant with CDSL

Motilal Oswal

Motilal Oswal Securities Ltd. (MOSL) was founded in 1987 as a small sub-broking unit, with

just two people running the show. Focus on customer-first-attitude, ethical and transparentbusiness practices, respect for professionalism, research-based value investing and

implementation of cutting-edge technology has enabled us to blossom into an over 1600

member team.

Today Company is a well diversified financial services firm offering a range of financial

products and services such as Wealth Management, Broking & Distribution, Commodity

Broking, Portfolio Management Services, Institutional Equities, Private Equity, Investment

Banking Services and Principal Strategies.


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Company has a diversified client base that includes retail customers (including High Net

worth Individuals), mutual funds, foreign institutional investors, financial institutions and

corporate clients. They are headquartered in Mumbai and as of March 31st, 2011, had a

network spread over 611 cities and towns comprising 1,644 Business Locations operated by

our Business Partners and us. As at March 31st, 2011, they had 709,041 registered customers.

Indiabulla

Indiabulls Group is one of the country's leading business houses with business interests in

Power, Financial Services, Real Estate and Infrastructure. Indiabulls Group companies are

listed in Indian and overseas financial markets. The Net worth of the Group is Rs 16,844

Crore and the total planned capital expenditure of the Group by 2013-14 is Rs 35,000 Crore.

Indiabulls Securities (ISL) is one of India's leading capital markets companies providing

securities broking and advisory services. Indiabulls Securities also provides depository

services, equity research services and IPO distribution to its clients and offers commodities

trading through a separate company. These services are provided both through on-line and

off-line distribution channels. Indiabulls Securities is a pioneer of on-line securities trading inIndia. Indiabulls Securities in-house trading platform is one of the fastest and most efficient

trading platforms in the country. Indiabulls Securities has been assigned the highest rating

BQ-1 by CRISIL.

Other main listed companies:

Indiabulls Financial Services (IBFSL) is one of Indias leading non-banking financecompanies providing Home Loans, Commercial Vehicle Loans and Secured SME

Loans. The company has a net worth of Rs 4,661 crore with an asset book of Rs

19,796 Crore. The company has disbursed loans over Rs 50,000 Crore to over

3,00,000 customers till date. Amongst its financial services and banking peers,

Indiabulls Financial Services ranks amongst the top few companies both in terms of

net worth and capital adequacy. Indiabulls Financial Services has been assigned


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AA+ rating and has presence in over 87 cities and towns with a total branch network

of 170 branches.

Indiabulls Real Estate (IBREL) is among India's top Real Estate companies withdevelopment projects spread across residential complexes, integrated townships,

commercial office complexes, hotels, malls, Special Economic Zones (SEZs) and

infrastructure development. Indiabulls Real Estate partnered with Farallon Capital

Management LLC of USA to bring the first FDI into real estate in the country. The

company has a networth of Rs 7,505 Crore and has purchased prime land, mostly in

the metros and other Tier 1 cities worth Rs 4,000 Crore in government auctions alone.

Indiabulls Real Estate is currently developing 61 million sqft into premium quality,

high-end commercial, residential and retail spaces. The company has been assigned

'A+' rating.

Indiabulls Power (IBPOW) is currently developing Thermal Power Projects with anaggregate capacity of 5400 MW. The first unit is expected to go on stream in May

2012. The net worth of Indiabulls Power is Rs 3,919 Crore. The company has a total

capital expenditure of Rs 27,500 Crore. The company has been assigned 'BBB' rating.

IndiaInfoline

The IIFL (India Infoline) group, comprising the holding company, India Infoline Ltd (NSE:

INDIAINFO, BSE: 532636) and its subsidiaries, is one of the leading players in the Indian

financial services space. IIFL offers advice and execution platform for the entire range of

financial services covering products ranging from Equities and derivatives, Commodities,

Wealth management, Asset management, Insurance, Fixed deposits, Loans, Investment

Banking, GoI bonds and other small savings instruments. IIFL recently received an in-

principle approval for Securities Trading and Clearing memberships from Singapore

Exchange (SGX) paving the way for IIFL to become the first Indian brokerage to get a

membership of the SGX. IIFL also received membership of the Colombo Stock Exchange

becoming the first foreign broker to enter Sri Lanka. IIFL owns and manages the website,


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www.indiainfoline.com, which is one of Indias leading online destinations for personal

finance, stock markets, economy and business

IIFL has been awarded the Best Broker, India by FinanceAsia and the Most improved

brokerage, India in the AsiaMoney polls. India Infoline was also adjudged as Fastest

Growing Equity Broking House - Large firms by Dun & Bradstreet. A forerunner in the field

of equity research, IIFLs research is acknowledged by none other than Forbes as Best of the

Web and a must read for investors in Asia. Our research is available not just over the

Internet but also on international wire services like Bloomberg, Thomson First Call and

Internet Securities where it is amongst one of the most read Indian brokers.

A network of over 2,500 business locations spread over more than 500 cities and towns across

India facilitates the smooth acquisition and servicing of a large customer base. All our offices

are connected with the corporate office in Mumbai with cutting edge networking technology.

The group caters to a customer base of about a million customers, over a variety of mediums

viz. online, over the phone and at our branches.


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CHAPTER 8

Types of Financial Instruments

Investment planning is necessary for everyone who wishes to achieve any financial goal. We

have to plan our limited resources to avail the maximum benefit out of them. We should plan

our investments to fulfill major needs like:

Creating wealth over the long term Acquiring assets like a dream house or a dream car Fulfilling our need for financial security

Thus, Investment Planning is nothing but a holistic approach to meet our life's goals so There

are different types of investment instruments available in market, from them few are listed

below.

Stock market

Mutual Funds

Insurance

Real EstatePost office savings

Commodity

Others

Fixed Deposits Gold Government Securities Bonds PPF(Public Provident Fund)

These are the different available investment instruments in market in which one can invest

and gain the maximum return over a specified period of time.


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Stock market

Basics of the Stock Market

The stock Exchange is a great alternative for the savings of people and institutions. It permits

them to obtain an important profitability against other types of official markets even if it

means assuming, possibly, a greater risk.

Stocks, a term used to symbolize an investors ownership of a company, are typically traded

on exchanges, a mechanism that allows buyers and sellers to converge and engage in the

process of buying and selling of stocks.

An investor who buys a companys stock becomes one of the companys owners, or a

shareholder, and theoretically owns a percentage of everything the company owns. The

percentage being determined by how much stock the shareholder owns. In reality, however,

only those who own large amounts of shares in any particular company have any real power

to change the course of the company.

There are a number of different exchanges in operation through which securities can be

bought or sold. The more popular exchanges are NSE and BSE.

How to invest in stock market

Share market is a place for the buying and selling of shares of Public Ltd.

Companies. It is basically an online dealing process.

There are two types of Exchanges in Indian Market:

NSE BSE

1. NSE : means Nat io na l Stock Exc hang e o f India2. BSE: means Bombay Stock Exchan ge of India.


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For the purpose of doing trading of Shares one needs to have,

1. D-Mat Account: means De-materialization A/c to maintain the sharespurcha sed in so ft data fo rm and no t in physic al fo rm.

2. Registration with the Broker after opening an D- Mat A/c. throughwhich you want to trade.

Benefits of Stock Market Trading

It promotes economic growth. It helps companies raise capital and handle financial issues. It ensures that money is invested in businesses to enhance profit potential.

It helps investors realize substantial profits.

Disadvantage of Stock Market Trading:

It proposes lower leverage than other forms of trading, such as Forex trading. The short selling of stocks is hard, because stock prices do not appreciate significantly

in a short span of time. Accordingly, there is a wait period before you can book

healthy profits.

It is traded for limited hours in a day.

Mutual Fund

A mutual fund is a professionally-managed firm of collective investments that pools money

from many investors and invests it in stocks, bonds, short-term money market instruments,

and/or other securities. In a mutual fund, the fund manager, who is also known as the portfolio

manager, trades the fund's underlying securities, realizing capital gains or losses, and collectsthe dividend or interest income. The investment proceeds are then passed along to the

individual investors. The value of a share of the mutual fund, known as the net asset value per

share (NAV), is calculated daily based on the total value of the fund divided by the number of

shares currently issued and outstanding.


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Depending upon the nat ure there are basically two types of mutual fund:

Open Ended: It is the mutual fund which you can buy and sell at any point of time, which

doesnt have any fixed matur ity period.

Close Ended: It is the mutual fund which we can buy only during the initial offer and not

during its routine period, it cant be also redeemed unless the end of the

per io d specifie d in the o ffer. That me ans it have a fix ed ma tur it y per io d, only

after which you will receive your money back.

Advantages of Mutual Funds

Diversification Liquidity Convenience Transparency Flexibility Tax benefits. Well regulated

Disadvantages of Mutual Funds:

No Guarantees Fees and commissions Taxes Management risk


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Insurance

Having the right kind of insurance coverage is an essential part of building a solid financial

future. You can insure your house, your vehicle, and even different parts of your body.

Through insurance you are equipped to meet any financial risks or crisis. In simple terms,

insurance is a contract between you and insurance company or association. Under this

contract the insurance company gives consent that they will bear the financial losses for

reasons such as theft or some natural calamities in return for a fixed monthly premium.

The main and the important part of the insurance contract is the policy document. According

to the policy document in whatever financial crisis you maybe the insurance company will be

taking care of all your expenses. It is recommended to take help from any insurance agent asthe process can be sometimes very complicated. Taking proper guidance from an expert will

beneficial as to get a suitable and profitable deal.

Types of Insurance

Health Care Insurance Life Insurance Home Insurance Travel Insurance Auto Insurance


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Real Estate

Most of the people make use of real estate as investment opportunity. Real estate is a big

market. People use different trends while looking the real estate market. Investing in real

estate is now a great way of earning money.

Investment in real estate involves the ability to afford. Some people prefer commercial real

estate to residential properties. However, the trends of real estate keep on changing always.

The cause of change in real estate trends can be anything ranging from change in economy to

rising interest rate and much more.

Every real estate investor should have at least the basic knowledge of the real estate law. A

real estate agent can be of great help in this regard. It is necessary to gather comprehensive

information about real estate before making any deal.

Post office savings

There are various investment schemes available in post offices, like KVP (Kisan Vikas Patra),

MIS (Monthly Income Scheme) and various others. All these schemes are completely risk-

free, and you do not need to have large sum of money to start investing in these post officeschemes. Some schemes offer Tax-saving benefits and some gives tax-free returns. So you

need to find out some scheme as per your requirements. These are some of the safe and secure

investments that you can choose for. Though the interest rates are not so high, but still you

must invest some part of your money into any of these investment instruments. It is your hard-

earned money, so better play safe and invests some part in secure funds also.


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Commodity

The terms commodities and futures are often used to depict commodity trading or futures

trading. It is similar to the way stocks and equities are used when investors talk about the

stock market. Commodities are the actual physical goods like gold, crude oil, corn, soybeans,

etc. Futures are contracts of commodities that are traded at a commodity exchange like MCX.

Apart from numerous regional exchanges, India has three national commodity exchanges

namely, Multi Commodity Exchange (MCX), National Commodity and Derivatives Exchange

(NCDEX) and National Multi-Commodity Exchange (NMCE). Forward Markets Commission

(FMC) is the regulatory body of commodity market.

It is one of a few investment areas where an individual with limited capital can makeextraordinary profits in a relatively short period of time. Many people have become very rich

by investing in commodity markets. Commodity trading has a bad name as being too risky for

the average individual. The fact is that commodity trading is only as risky as you want to

make it. Those who treat trading as a get-rich-quick scheme are likely to lose because they

have to take big risks. If you act carefully, treat your trading like a business and are willing to

settle for a reasonable return, the possibility of success is very high.

The course of trading commodities is also known as futures trading. Unlike other kinds of

investments, such as stocks and bonds, when you trade futures, you do not really buy anything

or own anything. You are speculating on the future direction of the price in the commodity

you are trading. This is like a bet on future price direction. The terms "buy" and "sell" merely

indicate the direction you expect future prices will move. If, for example, you were

speculating in wheat, you would buy a futures contract if you thought the price would be

going up in the future. You would sell a futures contract if you thought the price of wheat

would go down. For every trade, there is always a buyer and a seller. Neither person has to

own any wheat to participate. But he has to deposit sufficient capital with a brokerage firm to

insure that he will be able to pay the losses if his trades lose money.


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Working of Commodity Market:

Commodity Market works Just like stock futures. When you buy Futures, you don't have to

pay the entire amount, just a fixed percentage of the cost. This is known as the margin. Let's

say you are buying a Gold Futures contract. The minimum contract size for a gold future is

100 Gms. 100 Gms of gold may be worth Rs. 1, 50,000. The margin for gold set by MCX is

3.5%. So you only end up paying Rs 5,250.

The low margin means that you can buy futures representing a large amount of gold by paying

only a fraction of the price. So you bought the Gold Futures contract when it was Rs. 1,

50,000 per 100 Gms. The next day, the price of gold rose to Rs 1, 60,000 per 100 Gms. Rs

10,000 (Rs 1, 60,000 - Rs 1, 50,000) will be credited to your account. The following day, the

price dips to Rs 1, 55,000. Rs 5000 will get debited from your account (Rs 1, 60,000 - Rs 1,

55,000).

Others

Fixed DepositsSafest instrument to invest

Fixed deposits are investment scheme where one can deposit his funds for a fixed period and

earn a pre-determined interest rate. Basically they are common amongst average investors

who are risk averse and prefer to invest in safe instruments. FDs are considered to be safe

because they are subject to control of the Reserve Bank of India. In fact all bank deposits are

reasonably safe because banks are subject to control of the RBI with regard to several policy

and operational parameters.

Interest income

Fixed deposits earn higher interest rate in comparison to the savings bank account. Moreover

the interest offered on a fixed deposit depends on the tenure for which the deposit is fixed by

the investor. Usually if the maturity period of a deposit is longer, the interest earned on a FD


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is higher and vice-versa. Interest paid on a FD is either calculated a monthly basis or once a

quarter according to the investor's choice.

Effective return

Normally a FD does not provide a regular interest income but a lump-sum amount on its

maturity. Effective rate of return means that the interest earned during a year is not paid but

reinvested further. It ensures one to earn higher interest as compared to the interest earned on

yearly basis. Here the interest gets compounded over the period of investment.

GOLDGold has got lot of emotional value than monetary value in India. India is the largest

consumer of gold in the world. In western countries, you can find most of their gold in their

central banks. But in India, we use gold mainly as jewels. If you look at gold in a business

sense, you will understand that gold is one of the all time best investment tool

Demand for gold in the Indian Market:

India has the highest demand for gold in the world and more than 90% of this gold is acquired

in the form of jewellery. Following are the factors influencing the demand for gold.

The movement of gold prices is one of the important variables determining demand forgold.

The increase in the irrigation, technological change in agriculture (throughmechanization and high yielding varieties), have generated large marketable surplus

and a highly skewed rural income distribution is another factors contributing to

additional demand for gold.

Supply of Gold:

The main economic effects that arise from the changes in the supply of gold can be seen

against the quantum of gold that is already in existence in the economy. The supply of gold is

not up to the requirements as the production of gold is also coming down and demand for gold

is going up very sharply.


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BondWhat is bond?

Bond is a debt instrument issued by a company or a government. The buyer of the bond is

in effect loaning money to the institution and is promised the full principal plus a fixed

periodic payout during the tenure of the bond. The total payouts received together with the

final principal will be put together in a computation to determine the yield on the bond. The

yield, in layman's terms, is the effective interest rate earned on the bond for the entire

duration.

The different types of bond in India

Corporate Bond. Municipal Bond. Government and Agency Bond. Funding Bond. Mortgage Backed and Collateral Debt Obligation Bond.

GOVERNMENT SECURITIES (G-secs)Government securities (G-secs) are supreme securities which are issued by the Reserve Bank

of India on behalf of Government of India in lieu of the Central Government's market

borrowing program. The term Government Securities includes:

Central Government Securities. State Government Securities Treasury bills


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The Central Government borrows funds to finance its 'fiscal deficit'. The market borrowing of

the Central Government is increased through the issue of dated securities and 364 days

treasury bills either by auction or by floatation of loans. In addition to the above, treasury bills

of 91 days are issued for managing the temporary cash mismatches of the Government. These

do not form part of the borrowing program of the Central Government.

Features

Issued at face value No default risk as the securities carry sovereign guarantee. Ample liquidity as the investor can sell the security in the secondary market Interest payment on a half yearly basis on face value No tax deducted at source Can be held in De-mat form. Redeemed at face value on maturity Maturity ranges from of 2-30 years.

Public Provident FundPublic Provident Fund, popularly known as PPF, is a savings cum tax saving instrument. It

also serves as a retirement planning tool for many of those who do not have any structured

pension plan covering them. The balances in PPF account cannot be attached by any authority

normally.

How to Open Account

Public Provident Fund account can be opened at designated post offices throughout the

country and at designated branches of Public Sector Banks throughout the country.

Who can open Account?

The account can be opened by an individual in his own name, on behalf of a minor of whom

he is a guardian.


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Tabs on Investment

Minimum deposit required in a PPF account is Rs. 500 in a financial year. Maximum deposit

limit is Rs. 70,000 in a financial year. Maximum number of deposits is twelve in a financial

year.

Maturity

The maturity period of the account is 15 years. Rate of interest is 8% compounded annually.

One deposit with a minimum amount of Rs.500/- is mandatory in each financial year. The

amount of deposit can be varied to suit the convenience of the account holders.

The account holder can retain the account after maturity for any period without making any

further deposits. In this case the account will continue to earn interest at normal rate as

admissible till the account is closed. The account holder also has an option to extend the PPF

account for any period in a block of 5 years at each time, after the maturity period of 15 years.

Account Transfer

The Account is transferable from one post Office / bank to another and from post Office to

bank or from a bank to a post office.

Tax Benefits

Deposits in PPF are eligible for rebate under section 80-C of Income Tax Act.The interest on

deposits is totally tax free. Deposits are exempt from wealth tax.


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CHAPTER 9

DATA ANALYSIS & INTERPRETATION

Age: -

Table-1

Teenage 0

Young Age 50

Middle Age 48

Old Age 2

Chart-1

Interpretation:-

From the above chart we can see that maximum of young age people invest their

money in different instruments. And as well as Middle age people also show their

interest in investment to secure their future as well as their family. Old age people are

not taking that much risk to invest.


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Gender: -

Table-2

Male 93

Female 7Chart-2

Interpretation:-

From the above Pie chart we can see that most of the respondence are male and

interested to invest their money in different instrument compared to the Female

because they are the decision taker of the family. In Indian market most of the female

are the housewife so they are not showing their interest in investment.


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Marital Status: -

Table-3

Single 65

Married 35

Chart-3

Interpretation:-

From the above pie chart we can see that most of the single customers are taking

interest in investment to earn profit and their future. Married customers are also taking

interest but they are taking less risk to invest their money in different instrument. Here

65 customers are single they are ready to invest their money and 35 Married are also

invest their money in different securities to secure their familys future.


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Occupation: -

Table-4

Service 61

Business 28Professional 8

Student 1

Others 2

Chart-4

Interpretation:-

From the above Pie chart we can see that most of the service people are investing their

money in different investment instrument. 61 customers who are doing service, 28

customers who are businessman, 8 Professional people, 1 customer is student, 2

customers are others. These data shows that how many customers are in different field

and from that we collect the data about their investment power and their interest.


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Income (Annually):-

Table-5

Below 50,000 18

50,000-1,00,000 281,00,000-5,00,000 49

More than 5,00,000 5

Chart-5

Interpretation:-

From the above chart we can see that a person who has income of 1, 00,000-5, 00,000

are 49. 50,000-1,00,000 income people are 28 out of 100 and which shows their

efficiency to invest their money in different investment instrument which is helpful to

them in future and secure their money for their security of family.


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Since how many years have you been investing?

Table-6

Less than 1 year 17

1-3 year 28

3-5 year 245 years & above 31

Chart-6

Interpretation:-

From the above data we can get the information about the interested people to invest

their money in different instrument. 31 people out of 100 are invest their money for

more than 5 years, 28 people invest 1-3 years , 24 people invest for 3-5 years, 17

people invest for less than 1 year. So it shows that the person are showing their interest

in invest their money in different investment instruments.


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What are the various investment plans you invest in? *(Select all that are

applicable)

Table-7

Mutual Fund 27

Commodities 13

Equity Market 44

Insurance 63

Real Estate 21

Deposits 37

Others 8

Total 213

Chart-7

13%

6%

21%

33%

10%

17%

Instrument

Mutual Fund Commodities Equity Market Insurance Real Estate Deposits

Interpretation:-

From the above chart we can see that 33% of the people are invest their money in

insurance which shows that they are secure their family future which is unpredictable,

21% are invest in equity market to earn good amount of profit, 17% are invest in

Deposits which is safest investment in India, 13% are invest in Mutual fund, 10% are

invest in Real estate, 6% are invest in Commodities. Most of the investments are going

in insurance which is required to secure the family future and it also gives returns as

well.


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For how much period you would prefer to invest?

Table-18

Short Term 41

Long Term 67Depends on Finance 2

Total 110

Chart-8

Interpretation:-

From the above chart we see that most of the customers are invest their money for

long term and they take the benefit of the instrument and earn a profit from them. Here

61% of the customers are investing for long term, 37% of the customers are investing

for Short Term, and 2% of the customers are investing their money with the finance

available to them. So we can say that customers are interested to invest their money

for long term.


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What is the purpose behind investment?

Table-9

Returns 54

Liquidity 08Wealth 21

Tax Savings 23

Total 106

Chart-9

Interpretation:-

From the above chart we can see the dependence of the customers for what they invest

their money in difference instrument. Here we see that 51% of the investors are invest

their money for good returns, 22% are invest for tax savings, 20% for wealth and, 7%

for liquidity. So we can say that most of the investors are interested to make good

returns and take the benefit of the investment and earn good profit.


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Through whom you invest into equity market?

Table-10

Through online 17

Through Relationship Manager 4

Through Stock Broker 23Through Advisor 14

Self 2

Total 60

Chart-10

Interpretation:-

From the above information we can see which instrument equity investors use to trade

in equity market. Here we can see that 39% of the investors invest their money

through Stock Broker, 28% through online, 23% through advisors, 7% through

Relationship Manager, and 3% through Themselves. So from these we can say that

most of the investors invest their money in Equity Market through Stock Broker which

is convenient to them.


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What percent of your salary/Income goes to savings in insurance, mutual

funds & equity market?

Table-11

10-20 % 73

21-30 % 2131-40 % 4

Above 40 % 2

Chart-11

Interpretation:-

From the above chart we can see the % of salary a customer saving in different

investment. Here we see that most of the investors invest their salaries 10-20 % .Here

73 investors are invest 10-20% in different investment instrument, 21 are invest 21-

30% from their salary, 4 are invest 31-40% from their salary, and 2 are invest 40% or

more from their salary. So from all we can say that most of the investors invest 10-

20% of their salary in different investment instrument.


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Do you invest directly into equity?

Table-12

Yes 30

No 14

Chart-12

Interpretation:-

In above chart we can see the investors investment criteria regarding investment in

Equity market. They are investing their money directly or not. Here 68% of the

investors invest directly to the Equity market Where as 32% of the investors are not

invest directly in the equity market.


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In what kind of stocks do you trade or invest in?

Table-13

Large Caps 14

Mid Caps 13Small Caps 10

Depends 18

Total 55

Chart-13

Interpretation:-

In the above chart we can see that in which kind of stock the equity investors invest.

There is different option as per different customers. Here we see that 33% of the

investors are investment depends on their requirement, 25% of the investors invest in

Large Caps, 24% of the investors invest in Mid Caps, and 18% of the investors invest

in Small caps. So we can say that the investors not take chance to lose their money so

they invest as per market condition or they depend on their thinking in which kind of

stock they invest.


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Cross Tabulation with Income, Age, Occupation

WITH INCOME

Step 1. H0: Kind of stocks is independent of Income.

Ha: Kind of Stocks is Dependent of Income.

Step 2. The appropriate statistical test is

Step 3. = .05.

Step 4. R = 4, c = 4

(4-1) (4-1) = 9

0.05,9 = 16.9190

Step 5. Observed Data are as follow:

Income Large caps Mid Caps Small Caps Depends Total

below 50000 2 0 1 2 5

50,000-1,00,00 3 5 2 6 16

1,00,000-5,00,000 8 6 6 12 32

More than 5,00,000 1 0 0 1 2

Total 14 11 9 21 55

Step 6. = 4.31994


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Step 7. The Observed value of Chi-square, 4.31994, is less than the critical value of Chi-

square, 16.9190. So the null hypothesis that is kind of stocks preferred is independent

on Income and null hypothesis is accepted.

WITH AGE

Step 1. H0: Kind of stocks is independent of Age.

Ha: Kind of Stocks is Dependent of Age.


Step 3. = .05.

Step 4. R = 4, c = 4

(4-1) (4-1) = 9

0.05,9 = 16.9190


Age Large caps Mid Caps Small Caps Depends Total

Teenage 0 0 0 0 0

Young Age 6 6 3 5 20

Middle Age 8 5 6 15 34

Old Age 0 0 0 1 1

Total 14 11 9 21 55

Step 6. = 4.588235


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on age and null hypothesis is accepted.

WITH OCCUPATION

Step 1. H0: Kind of stocks is independent of Occupation.

Ha: Kind of Stocks is Dependent of Occupation.


Step 3. = .05.

Step 4. R = 4, c = 5

(4-1) (5-1) = 12

0.05,12 = 21.0261


Occupation Large caps Mid Caps Small Caps Depends Total

Service 9 10 9 9 37

Business 4 1 0 7 12

Professional 1 0 0 4 5

Student 0 0 0 0 0

Others 0 0 0 1 1

Total 14 11 9 21 55


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Step 6. = 14.36079



on Occupation and null hypothesis is accepted.


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If you are an Investor what induces you to invest in a intraday trading?

(Mark all that applies)

Table-14

Tips 19News 10

Research Report 80

Personal Homework 18

Delivery 3

Total 58

Chart-14

Interpretation:-

The above chart show about the inducement of the investors to invest in Intraday

Trading. Here we see that 61% of the investors invest their money with the help of

reading research report, 15% are invest with the help of Tips from the various

companies, friends, etc; 14% are invest with the help of personal homework, 8% are

invest with the help of News, and 2 % do the delivery. So all over we can say that the

most of the investors invest with the help of research report.


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WITH INCOME

Step 1. H0: Induces to invest in intraday trading is independent of Income.

Ha: Induces to invest in intraday trading is Dependent of Income.


Step 3. = .05.

Step 4. R = 4, c = 4

(4-1) (4-1) = 9

0.05,9 = 16.9190


INCOME Tips News

Research

Report Personal Hw TOTAL

below 50000 3 0 1 0 4

50,000-1,00,00 6 4 1 6 17

1,00,000-5,00,000 11 6 6 11 34

More than 5,00,000 0 0 0 0 0

Total 20 10 8 17 55

Step 6. = 5.56542


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square, 16.9190. So the null hypothesis that is Induces to invest in intraday trading

is independent on Income and null hypothesis is accepted.

WITH AGE

Step 1. H0: Induces to invest in intraday trading is independent of Age.

Ha: Induces to invest in intraday trading is Dependent of Age.


Step 3. = .05.

Step 4. R = 4, c = 4

(4-1) (4-1) = 9

0.05,9 = 16.9190


Age Large caps Mid Caps Small Caps Depends Total

Teenage 0 0 0 0 0

Younge Age 6 6 3 5 20


Old Age 0 0 0 1 1

Total 14 11 9 21 55

Step 6. = 5.210708


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is independent on age and null hypothesis is accepted.

WITH OCCUPATION

Step 1. H0: Induces to invest in intraday trading is independent of Occupation.

Ha: Induces to invest in intraday trading is Dependent of Occupation.


Step 3. = .05.

Step 4. R = 4, c = 5

(4-1) (5-1) = 12

0.05,12 = 21.0261


OCCUPATION Tips News

Research

Report

Personal

Hw TOTAL

Service 14 5 5 13 37

Business 5 4 2 3 14


Student 0 0 0 0 0

Others 0 1 0 0 1

Total 20 10 8 17 55


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Step 6. = 14.36079



is independent on Occupation and null hypothesis is accepted.


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What is your pattern of investing or trading?

Table-1 5

Repeatedly invest or trade in same set of stocks 11

Invest or trade in variety of stocks 16Depends on other factors 25

Total 52

Chart-15

Interpretation:-

In the above chart we can see the pattern of investment. Here there are 2 different

patterns. Here 48% of the investors depend on the factors & they use pattern as per

that dependence, 31% of the investors invest or trade in variety of stocks, 21% of the

investors repeatedly invest or trade in same set of stocks. So we can say that the mostof the investors depends on the factors then they decide pattern as per that.


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What kind of investing or trading do you adopt?

Table-16

High Risk - High Return 15

Low Risk - High Return 21Low Risk - Low Return 5

Safe Investments 12

Total 53

Chart-16

Interpretation:-

In the above chart we can see that in which kind of investing or trading they adopt.

Here 40% of the investors are invest their money with low risk-high return basis, 28%

of the investors are invest their money with High risk-High return basis, 23% of the

investors are Safe investors, 9% of the investors are low risk-low return investors. So

we can say that the 40 % are the investors who want high return with low risk.


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WITH INCOME

Step 1. H0: kind of investing or tradingis independent of Income.

Ha: kind of investing or tradingis Dependent of Income.


Step 3. =.05.

Step 4. R = 4, c = 4

(4-1) (4-1) = 9

0.05,9 = 16.9190


Income

High Risk -

High Return

Low Risk -

High Return

Low Risk -

Low Return

Safe

Investments

Total

below 50000 0 4 0 1 5

50,000-1,00,00 2 5 4 3 14

1,00,000-5,00,000 12 7 2 7 28

More than 5,00,000 0 2 0 0 2

Total 14 18 6 11 49

Step 6. = 15.83056


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square, 16.9190. So the null hypothesis that is kind of investing or trading isindependent on Income and null hypothesis is accepted.

WITH AGE

Step 1. H0: kind of investing or tradingis independent of Age.

Ha: kind of investing or tradingis Dependent of Age.


Step 3. =.05.

Step 4. R = 4, c = 4

(4-1) (4-1) = 9

0.05,9 = 16.9190


AGE

High Risk -

High Return

Low Risk -

High Return

Low Risk -

Low Return

Safe

Investments

Total

Teenage 0 0 0 0 0

Young Age 6 5 2 5 18


Old Age 0 1 0 0 1

Total 14 19 5 11 49


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59

Step 6. = 2.805657


square, 16.9190. So the null hypothesis that is kind of investing or trading isindependent on age and null hypothesis is accepted.

WITH OCCUPATION

Step 1. H0: kind of investing or tradingis independent of Occupation.

Ha: kind of investing or tradingis Dependent of Occupation.


Step 3. = .05.

Step 4. R = 4, c = 5

(4-1) (5-1) = 12

0.05,12 = 21.0261


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OCCUPATION

High Risk -

High Return

Low Risk

- High

Return

Low Risk - Low

Return

Safe

Investments

Total

Service 8 12 4 7 31

Business 4 5 1 2 12


Student 0 0 0 0 0

Others 1 0 0 0 1

Total 6 19 5 11 49

Step 6. = 17.92897


square, 21.0261. So the null hypothesis that is kind of investing or trading isindependent on Occupation and null hypothesis is accepted.


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61

If you are an Investor what induces you to stay invested in a particular

Stock? (Mark all that applies)

Table-17

Dividend Paying 16Organic Growth 8

Inorganic Growth 2

Future Prospects 29

Total 55

Chart-17

Interpretation:-

In above chart we can see that what induces the investors to stay in investment. Here

53% of the investors are invest because of future prospects, 29% are Invest because of

good dividend paying by the companies, 14% are invest because of organic growth,

4% are invest in Inorganic growth. So we can say that the maximum number of

investors invest because of securing their future.


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62

The reason for your investment in Mutual Funds is (Select all that are

applicable)

Table-18

For family 12Returns 17

Tax Savings 9

Pension 4

Liquidity 3

Others 0

Total 45

Chart-18

Interpretation:-

In above chart we see the reasons for invest in Mutual Fund. As investors are invest

their money for different reasons. Here 38% of the investors are invest their money in

mutual fund for good returns, 27% of the investors are invest for secure their family

future, 20% are invest for Tax savings, 9% are invest for pension plan, 6% are invest

for Liquidity. So from these we can say that most of the investors invest because of

good return as well as for securing their future of the family.


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63

The reason for your investment in insurance is (Select all that are

applicable)

Table-19

For family 50Returns 16

Tax Savings 17

Pension 02

Liquidity 05

Others 01

Total 91

Chart-19

Interpretation:-

In above chart we see the reason for invest in Insurance. Here 55% of the investors

invest in insurance for the purpose of their family security and their safety future, 18%

of the investors invest for returns, 19% of the investors invest for tax savings, 5% for

the Liquidity, 2% for the pension, 1% for the others. So here we can say that most of

the investors invest in insurance because of their family, their security, and their

future.


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64

Who Influences you the most to invest in a particular option?

Table-20

Family 51

Friends 29Relatives 09

Newspapers/ Magazine 12

Brokers 19

Self 09

Total 129

Chart-20

Interpretation:-

In the above chart we can see which induces the investors to invest in particular

investment instrument. Here 40% of the investors induce by the family, 22% of the

investors induce by friends, 15% induce by Brokers, 9% induce by

newspaper/Magazines, 7% induce by self and relatives. So we can say that most of the

investors are induced by their family because they invest for them and they want to

secure their family future and life style.


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65

Rate your awareness with respect to different investment Plans

Table-21

Not Aware Little Aware Fully Aware

Mutual Fund 35 37 28Insurance 15 23 62

Equity Funds 38 27 35

Commodities 62 27 11

Real Estate 39 36 25

Chart-21

Interpretation:-

In the above chart we see the awareness of the investors about different investment

instrument. Here we have given different investment and some customers are aware

about that instrument or some are not aware. Here we see the instrument like mutual

fund, Insurance, Equity fund, Commodities, Real estate. In mutual fund 35 are not

aware, 37 little aware, 28 are fully aware. In Insurance 15 are not aware, 23 little

aware, 62 are fully aware. In Equity fund 38 are not aware, 27 little aware, 35 are fully

aware. In commodities 62 are not aware, 27 little aware, 11 are fully aware. In Real

Estate 39 are not aware, 36 little aware, 25 are fully aware. So from overall we can say

that most of the investors aware about insurance.


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66

Rate the Equity plans with respect to the qualities *1 Being Lowest & 5

Being Highest

HYPOTHESIS

ReturnsStep 1. H0: > 3

Ha: 3


Step 3. = 0.05

Step 4. Z=0.5000-0.0500 = 0.4500

Z= -1.645

Step 5. Data

x = 3.909091, = 3, = 0.174537, n = 44

Step 6. Z = 5.208584

Step 7. Accept the null hypothesis. The calculated value (5.208584) is more than tabulated

value (-1.645) so null hypothesis is accepted.

RiskStep 1. H0: > 3

consumer behavior regarding investment in ahmedabad

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